HC Deb 11 November 1936 vol 317 cc851-2
22. Captain MACDONALD

asked the Secretary of State for the Colonies whether he will state the colonies or territories among which the loss of same £2,500,000 sterling was distributed, incurred mainly due to the fluctuations of the rupee, by the East African Currency Board.


The East African Currency Board operates in the territories of Kenya, Uganda and Tanganyika, and has this year extended to Zanzibar. It was set up at the end of 1919, and, owing to the fact that it was compelled to take over Indian rupees at 2s. which subsequently fell, it incurred a loss of £916,310 between the years 1920 and 1923. During the same period it sustained further losses amounting to £610,024, due to the redemption of the rupees which had been issued by the German Government in Tanganyika. A further depreciation in the Board's assets has been caused by the fall in the value of silver since 1920 when the Board had to purchase silver for its coinage. The loss on that account stood in June, 1935, at £619,000, though, of course, it varies in accordance with the current price of silver. In addition the Board in 1920 took over the East Africa Protectorate Note Guarantee Fund, and was faced with a liability on that account of £203,200. The loss has fallen upon the East African Currency Board and its effect has been to reduce the Board's assets (which are being replenished from its annual income). No payment has been made from the funds of any of the territories concerned.


Is the Currency Board being reimbursed for this loss?


No, the Currency Board is now making a substantial profit and it is considered sufficient to make up for this loss, which accrued for very special reasons when the board began.